TriNet Group Inc. said late Thursday it had entered an agreement to acquire human-resources and payroll platform Zenefits from investment firm Francisco Partners for an undisclosed amount of stock and cash.
The Dublin, Calif-based HR cloud-software provider for small-to-medium businesses said acquiring Zenefits will expand TriNet’s TNET, +0.56% reach to serve more than 24,000 small-to-medium businesses and about 600,000 employees. Zenefits was once valued as high as $4.5 billion back in 2015 in its last round of VC funding.
“The timing is perfect for this acquisition given the recent small business boom and increase in new entrepreneurs that can benefit from our service offering,” said Burton Goldfield, TriNet chief executive, in a statement. “TriNet’s commitment to powering the success of small and medium-size businesses will be expanded to include an [administrative services oirganization] product offering—leveraging Zenefits’ industry leading cloud HR platform.”
Zenefits, however, has had a bit of a checkered past. In 2015, it had to cut back on expenses as it failed to meet aggressive revenue targets. Then, in 2016, it was fined $7 million by regulators over licensing violations, and had to crack down on what was considered a frat-house culture.
Trinet said it expects the deal to close “in the coming months.” Shares of TriNet rose 2% after hours, following a 0.6% rise to close the regular session at $94.57.